Some have gone a step beyond mere custom home tweaks though, creating showpieces worthy of a Lifestyles of the Rich and Famous segment. In fact Casa Cielo was featured on a similar TV show and no wonder: it’s got seven en-suite bedrooms, five of them with terrace pools, and just about every luxury amenity you could want. Filled with top-end imported appliances, extensive hand-crafted details, and a master bedroom that puts most hotels to shame, the owners have gone all the way on every aspect, including large walk-in closets and plenty of remote-controlled electronics. (Fortunately, this high up on a mountain, there’s little worry about salt air corrosion.)
Listed at $3.3 million, it’s the kind of dream home that would leave a large family with rotating guests wanting for nothing, or it could function as a luxury B&B or villa rental. A main infinity pool surrounded by lounge chairs, small yard with a playground, and a gym on site all back up an amazing view that evolves throughout the day and night.
Nearby, one of Mexico’s top luxury home developers has just started work on another high-end project further removed from the center: Punta Garrobo. The first house is under construction now and lots are for sale. Views here are of sea and surf—the area is best known as a scuba diving spot—but not of a mass of other homes or condos. If plans play out though, a high-end hotel, marina, and beach club will anchor the property.
Ixtapa and Beyond
Other communities not far from Zihuatanejo offer different options. Ixtapa is a purpose-built resort zone, so picture lots of high-rise concrete condo buildings with Señor Frog’s and a Hard Rock Café nearby. There are several condo developments in this area aimed at luxury buyers, however. A few are near the main tourist beach, while others look out at waves crashing against cliffs instead.
Punta Ixtapa is the development with the most cachet (Carlos Slim supposedly owns a unit here). Murphy has a 3BR unit with a private pool and easy beach access—but no direct sea view—for $630,000. Watch the monthly maintenance charges at these high-end condo developments with lots of common facilities and hotel-like services, however: for this unit that’s $1,500 per month.
Some of the luxury condos in this area are resales, which seems safer at the moment than putting a deposit down on a pre-construction project. The development next to Capella Ixtapa looked to be about half sold when I visited in mid-2011, with some units filled with outdoor furniture and plants, others just a concrete shell ready for finishing. At least the infrastructure is all in place there, however: others are no more than architectural models and renderings in an office.
For those who don’t require a water view, homes on the golf course in Ixtapa are significantly less, going for anywhere from $200,000 to $750,000 depending on view, size, and amenities.
About another 20 minutes more down the coast is Troncones, which has a nice village feel and plenty of beachfront housing. John Murphy has one listing there priced at $5 million. It has around 60 meters/yards of beach frontage and a spectacular home with extensive detailing. Inside there are four bedrooms and five baths. A 40-foot infinity pool overlooks the beach and naturally there’s a palapa bar and outdoor barbecue.
Judith Whitehead has a listing nearby that’s a collection of one large main house and three guest homes on a huge beachfront lot for $2 million.
Coastal Property Hurdles and Mexican Real Estate
Buying in Mexico can be straightforward, but naturally there are some specific quirks. There is not much of a lending infrastructure in place in for property investing, so most buyers need to be liquid enough to pay cash. Even when you can get financing, the interest rate is high (often 8-12%), you need to put at least 30% down, and the mortgage period is short. “Plus it’s almost impossible to get a loan for more than a million dollars from anyone,” says Murphy.
Some manage to work out owner financing for part of the purchase price, but usually with a balloon payment due after five or seven years. In other words, foreigners who own million-dollar mansions in Mexico really are millionaires, not just aspirational homeowners in over their heads.
As in all of coastal Mexico, buyers must also pay for a fideicomiso, an extra annual land trust tax on foreigners that doesn’t result in any extra services. Still, with property taxes being less than half of one percent, overall carrying costs are low—a tiny fraction of what they would be for a comparable house in the U.S. or Canada.
On the plus side, the owners of these homes may exclude some art and keepsakes, but commonly these houses are sold furnished. Move in with a suitcase of clothes and you’re done.
Story and photos by Timothy Scott.